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Oil and Gas Processing Investment Incentive (OGPII)

The Oil and Gas Processing Investment Incentive (OGPII) offers transferable royalty/freehold production tax credits for qualified greenfield or brownfield value-added projects at a rate of 15 per cent of eligible project costs.

OGPII is open to value-added processing projects as well as gas, byproduct, or waste product commercialization projects across all segments of Saskatchewan's oil and gas sector. Eligible projects may include, but are not limited to:

  • Refineries/upgrading facilities (ex. partial upgraders, asphalt production and sulphur removal units);
  • Gas commercialization projects (ex. processing facilities, flare/waste-gas-to-power, etc.);
    • Regional gas-gathering projects and projects with multiple phases may also be considered under a single project application;
  • Petrochemical facilities (ex. methanol, ammonia, polypropylene, olefins and ethylene);
  • Helium processing and liquefaction facilities;
  • Oil and gas production byproduct and waste commercialization (ex. lithium extraction from produced water and carbon capture, utilization and sequestration for enhanced oil recovery); and
  • Enabling infrastructure, that is directly linked and dedicated to an eligible project, may also be considered.

OGPII is administered by the Ministry of Energy and Resources.

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1. Benefits

  • The credits are fully transferable. This gives non-producers/non-royalty payers an opportunity to benefit from the program because they have the ability to transfer credits to royalty/freehold production tax payers. Also, OGPII encourages multi-company projects as costs can be incurred by an entity other than the principal applicant.
  • OGPII has a project-specific awarded credit cap of $75 million (i.e. a $500 million project).
  • Credits can be claimed at a rate of 20 per cent of total credits in the first calendar year of operations, 30 per cent in the second calendar year, and 50 per cent in the third calendar year.
  • OGPII can be used alongside other incentive and grant programs available in Saskatchewan.
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2. Eligibility

  1. Eligible activity – all activities which add or create value by processing, transforming and/or upgrading upstream oil and gas industry products or by commercializing upstream oil and gas production byproducts and waste products may be considered eligible. Eligible projects can include new facilities or expansions of existing facilities.

  2. Increase in processing capacity – the ministry must be satisfied that the project results in a significant increase processing capacity or byproduct/waste product commercialization in Saskatchewan's oil and gas industry.

  3. Eligible costs – the eligible project must involve a minimum investment of $10 million in eligible costs.
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3. How to Apply

To apply for the OGPII program, companies need to complete and submit the OGPII Application Form. If you have questions about the application process, refer to the OGPII Program Overview and Application Instructions or contact ogpii@gov.sk.ca. Completed OGPII Application Forms may be submitted to the Ministry of Energy and Resources via ogpii@gov.sk.ca.

The ministry will be accepting applications from 8:00 a.m. (CST) on July 8, 2019 to March 31, 2024.

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5. Further Information

For additional information on the program, contact ogpii@gov.sk.ca.

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